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Guess Who’s Coming to Dinner?

APARTMENT FINANCE TODAY • October 2008

A Long Beach, Calif., apartment property accidentally invites the fire department over.

BY LIZ ENOCHS

When you turn on your stove to cook dinner, it probably never occurs to you that your next action could profoundly affect the lives of your neighbors. Yet that was the case for a woman in Long Beach, Calif., in December 2006.

The woman, a resident of the Paradise Gardens apartment complex in this Los Angeles-area community, saw her grease-filled skillet catch fire. She panicked, racing to open the balcony door before fleeing down the indoor hallway and leaving the interior door open as well.

Although she warned the on-site property management team and they called 911 right away, the damage was done. The open doors created a wind tunnel in the woman’s apartment, allowing what had been a minor fire to spread from apartment to apartment, smoking out more than 256 tenants, and eventually drawing 204 firefighters to the site to battle a blaze that continued long into the night. Two people were killed that night, and several, including some firefighters, were sent to the hospital for treatment of their injuries.

It was the largest fire in Long Beach history.

“Many tenants were very, very upset, and understandably so,” said Dan Wayne, a principal with Argentx Management Services, owner and operator of the Paradise Gardens, as well as about 1,500 other units in California, Nevada, and Colorado. “They didn’t know where to direct their frustration, so—guess what— they directed it at us.”

To make matters worse, the property, which had been built in 1966, contained asbestos, so the South Coast Air Quality Management District showed up, took possession of the property, barred access—even to the owner—and declared it a hazardous waste site. Anything porous, meaning, among other things, “every piece of clothing belonging to every tenant,” said Wayne, was considered hazardous and had to be destroyed.

To help tenants recover at least some of their possessions, Argentx hired an abatement company to go into the building with a camera to document and itemize all the possessions in every one of the 153 affected apartments. “I would say to my tenants, ‘If we can get the air quality management district to release your belongings, I will help you carry them out tonight,’” recalled Wayne.

Ironically, Argentx had been in regular contact with the local fire department in the weeks before the fire, had made a number of improvements to meet firefighters’ specifications, and was scheduled to undergo a final inspection earlier that week until the inspector asked to reschedule.

What the company didn’t have in place that would have made a difference, according to Wayne, was a “monitored” fire alarm system that would automatically ring through to the fire department once an alarm was triggered. “If I had a ‘coulda-wouldashoulda,’ I wish that was something that was put in,” he said.

The blaze caused about $7 million in damage and put the property out of commission for about a year. Business interruption insurance covered the loss of rents for that time, but not the diminished income for the first few months of 2008 as the building remained below full occupancy while it leased back up, said Wayne.

Wayne was on the site for 28 straight hours after he got the alarm and showed up every day for some time afterward to help man the operations center and assist tenants in whatever way he could. That demonstration of caring and concern made a big difference with tenants, he said.

“Believe it or not, my first tenant back into the building was a previous renter,” said Wayne. “I’ve got tenants who lost everything in this fire, and they called us every month to find out when they could move back in.”